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CASE
This case was written by Vranda Jain (Jaipuria Institute of Management, Noida). It is intended to
be used as the basis for class discussion rather than to illustrate either effective or ineffective
handling of a management situation. The case was compiled from generalised experience.
No part of this publication may be copied, stored, transmitted, reproduced or distributed in any
form or medium whatsoever without the permission of the copyright owner.
SAURABH’S DILEMMA: ACCOUNTANT VERSUS ECONOMIST
PERSPECTIVE
Key Words: Managerial decision making, Opportunity Cost, Economic Profit, Value of
the firm.
This is not possible. I plan to run the school for profit; and not for salary. I will
not draw any salary from the school earnings.
I am investing my own hard earned money in the business. I am not taking a loan
from the bank. I am not paying any interest on my own money. I am indeed
happy that my business plan is free from any debt to bank or moneylender, for
that matter.
I just don’t understand that when I am trying to save some money by providing
my own services and expertise; by investing my own capital, how can I incur net
losses?